[1) does it cause any risks
2) why do DBA's use it
3) if it does cause risks - are there any safer alternatives to get the same result?

1) Yes. Because is auto-shrink you can't control when it going to trigger. Can be during a period that your database need to be available and depending of the size of data and the fragmentation it can take hours to shrink and during the process will cause locks so no one will be able to do any operation on the database.
2) Because DBA's are wise people and like to control their own databases :)
3) Rebuild indexes

NOTE: Shrinking transaction log files aren't that bad as data files but can have some impact in the performance because if SQL Server needs to growth the tlog file it will block until all the empty space are filled with zeros.

1. It can reduce performance.
2. They don't if they are wise. Growth will soon happen, so all of the auto-shrink is not needed.
3. Manually shrink it if required, and then only to the extent that is needed.

1) Shrinking dbs causes delays in processing and can cause huge performance overhead. This includes, but is not limited to, releasing and reacquiring disk space, and fragmenting table indexes. Shrinks are only very selectively needed, thus there is never a need to auto-shrink a db.

2) DBA's don't use it [auto-shrink], ever.

3) Pre-allocate sufficient space, particularly log space. In the very rare cases when a shrink is needed, do them as efficiently as possible.

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